Lawmakers press GM CEO Mary Barra on report's findings

WASHINGTON (AP) -- Lawmakers expressed disbelief Wednesday at General Motors' explanation for why it took 11 years to recall millions of small cars with defective ignition switches, and also confronted its chief executive with evidence that the company dragged its feet on a similar safety issue in different vehicles.

CEO Mary Barra and attorney Anton Valukas, who recently released a 315-page investigative report into the recall, endured skepticism and some lecturing at a House subcommittee hearing. One member referred to the actions of some employees described in the report as "insane."

Barra made her second appearance before the committee since GM recalled 2.6 million small cars in February. As families of some of the people who died in crashes in Chevrolet Cobalts and Saturn Ions looked on, she was again pressed on whether GM's commitment to safety has changed much.

Rep. Fred Upton, R-Mich., read a 2005 e-mail from a GM employee whose 2006 Chevrolet Impala stalled after its ignition slipped out of position while she was driving it. "I'm thinking big recall," the employee wrote - but that recall never came until this week.

Upton asked Barra what GM would do with such an e-mail if it was sent today, and Barra said GM would take "immediate action." GM has issued 44 recalls covering nearly 18 million cars in the U.S. this year.

Barra noted that GM has recently hired 40 more safety investors. But when she acknowledged that most of them were promoted from within GM, another member suggested GM get some "outside fresh blood."

The small-car recall has triggered a deeper look by federal regulators at ignition switches across the auto industry. On Wednesday, the government opened an investigation into reports of defective switches on 1.2 million Chrysler vehicles.

Lawmakers at the hearing were skeptical of many of the conclusions in Valukas's report, which was paid for by GM and released June 5. The report found that a lone engineer, Ray DeGiorgio, was able to approve the use of a switch that didn't meet company specifications. Years later, he ordered a change to that switch without anyone else at GM being aware.

Panel members said that defied credibility at a company with 210,000 employees. Rep. Jan Schakowsky, D-Ill., produced e-mails showing that other employees were informed of the change.

"I do think these documents point to the fact that the problem at GM is deeper than one rogue engineer," she said.

Valukas said the employees DeGiorgio notified were from the warranty area, and the change "meant nothing to them." But he conceded his law firm did not interview everyone included in the emails.

GM blames the switches for 13 deaths, but Rep. Diana DeGette, D-Colo., said there could be up to 100 deaths associated with the problem.

Photos of some of those victims lined the back wall of the packed hearing room, and about a dozen relatives of victims attended the hearing.

GM is establishing a compensation fund for those killed or injured because of the switches, and Barra said Wednesday there will be no cap on the amount the fund can pay out. Attorney Kenneth Feinberg is still determining who will qualify for compensation, she said. GM expects to start taking claims Aug. 1.

"We want to capture every single person who suffered injury or lost a loved one," Barra said.

But Rep. Morgan Griffith, R-Va., said GM's lawyers are trying to use the company's 2009 bankruptcy to thwart lawsuits. He said GM wants to force victims from pre-bankruptcy crashes to accept its settlement offers or risk getting little compensation.

Barra didn't directly respond to Griffith's complaint.

The ignition switch in Cobalts, Saturn Ions and other cars could move out of the run position because of a heavy keychain or a bump of a knee. That causes the engine to stall, cuts off power-assisted steering and brakes and disables the air bags.

GM took years to make the connection between the switches and the air bag non-deployment. Valukas said a culture that prevented information sharing and discouraged people from taking action on problems was partly to blame.

Valukas said GM engineers also viewed the ignition switch malfunctions and engine stalling as a "customer convenience issue" rather than a safety problem, believing drivers could adequately control their cars without power steering and power brakes.

"That's just insane, isn't it?" DeGette asked Valukas.

"I don't want to use the word insane, but I'm deeply troubled by that," he replied.

Barra confirmed GM has dismissed 15 people who "didn't take action, or didn't move with urgency" to solve the ignition problems. DeGette said she has heard there is "more paranoia" within the company since the Valukas report came out.

But Barra said she is also encouraging employees to speak up about potential safety issues and is rewarding - not punishing - those who do. She said she has already gotten dozens of emails from employees reporting safety concerns.

Rep. Michael Burgess, R-Texas, said he thinks more than 15 should have been terminated, based on what he read in the Valukas report.

GM paid the maximum $35 million fine to the government in May for failing to disclose the problem sooner. Rep. Paul Tonko, D-N.Y., said that's not enough of a deterrent for a company like GM, which earned $3.8 billion last year. A bill now in the Senate would lift the cap on government fines.

Tonko said the government's regulatory agency, the National Highway Traffic Safety Administration, needs more detailed data from automakers to help track safety problems.

NHTSA admitted during April testimony that it was contacting other automakers and suppliers to find out how their ignition switches interact with air bags. That could lead to even more ignition-related recalls. On Wednesday, the agency opened an investigation into switches on 1.2 million Chrysler vehicles after getting complaints that the cars can suddenly stall and the air bags won't inflate in a crash.

Comments

It's funny and ironic that the congress folks ask about cultural problems and wanting to know when GM's culture changed, since they are the ones that have the worst cultural problems of any company and institution in this country They have adopted the worst culture in the world and then ask why did GM have cultural problems. Amazing, but not surprising.

I have a hard time understanding the hoopla. Although less than 100 people have been killed/hurt over a 10 year period more than several thousand are killed in alcohol related accidents yearly, how many are killed texting while driving, etc. and how many are killed by guns each year. But Congress is always looking for sound bites. Ask any parent who has lost a child and the pain is the same, the anger is the same - but addressing the issue by Congress is not the same.

"Not for nothing", this lady must be lauded for all she has gone through with these hearings on the Hill in the past few months. Not only were these events brought to light (and hushed-up) long BEFORE she was in the hot seat, but I haven't heard of any of her predecessors being hauled in to appear before the Inquisition to answer for what happened during their watch(es)!

Barra is part of the dysfunctional culture of GM.. She should be replaced by an "outsider" that is not part of this old regime! She should be held criminally accountable for the many deaths this cover up has caused.

GM cars are hunks of junk and it's proof of the stupidity and ignorance of the average american that they continue to buy gm death traps as if they are lemmings being led to the cliff's edge. These are the same idiots who voted in the community activist the lyin king for two damn terms. Sometimes you get what you deserve.

See what happens when the LIBERAL gubmint appoints the board, assigns who can own the stock and who should be the CEO.... The old GM entered its dramatic decline when the board appointed bean counters to be decision makers (remember H. Ross Perot vs. Roger Smith?) and capitulates to the UAW dementia.... Barra was part of the old guard bred and trained by the bean counters, Wall Street arbitrage crooks and UAW... and the FACT no one seems to be remembering - was in charge of Chevy, Olds and Pontiac during the time the faulty parts were spec'd, purchased and installed.